European Stock Futures Higher; Asian Gains Help Ahead of U.S. Jobs Report

By Peter Nurse 

Investing.com - European stock markets are expected to open higher Friday, aided by a positive tone in Asia on China reopening speculation, ahead of the release of the widely-watched official U.S. jobs report.

At 03:00 ET (07:00 GMT), the DAX futures contract in Germany traded 0.6% higher, CAC 40 futures in France climbed 0.6% and the FTSE 100 futures contract in the U.K. rose 0.7%.

European equities are set to receive a boost from the strong gains seen in Asia Friday on renewed speculation over an imminent relaxation of China's COVID-19 curbs, potentially lifting economic activity in the world’s second largest economy and a major European export market.

The Hang Seng index in Hong Kong gained around 6%, while China’s blue-chip Shanghai Shenzhen CSI 300 index surged 3.2% and the Shanghai Composite index jumped 2.4%, both trading around three-week highs.

A report released earlier this week suggested the Chinese government was forming a special committee to consider the scaling back of its zero-COVID policy. This was denied by the Chinese authorities, but fresh rumors circulated earlier Friday that this policy will soon have a substantial change. 

Such a change would be positive for the global economy, however gains are likely to be limited in Europe as investors remain wary about the impact of the U.S. Federal Reserve's aggressive monetary tightening. 

The U.S. payrolls report is due later in the session, and is expected to show that nonfarm payrolls increased by 200,000 jobs in October. An upside surprise could cement another hefty Fed hike in December.

Back in Europe, German factory orders fell a hefty 4.0% on the month in September as the Eurozone’s largest economy struggled with soaring energy prices.

Final October manufacturing and services activity data for the Eurozone are also due later in the session.

In the corporate sector, Societe Generale SA (EPA:SOGN) will be in the spotlight after France's third-biggest listed bank joined European rivals in posting a higher-than-expected net income in the third quarter as market volatility boosted trading revenues.

Oil prices rose Friday, helped by an easing dollar and fresh rumors that China plans to scale back COVID-related restrictions, while traders await news on the potential passing of a price cap on Russian exports, a plan aimed at squeezing funding to Moscow without cutting supply to consumers. 

Reuters reported, late Thursday, that the G7 nations, and Australia, have agreed to set a fixed price when they finalize a price cap on Russian oil later this month, rather than adopting a floating rate.

By 03:00 ET, U.S. crude futures traded 2.7% higher at $90.52 a barrel, while the Brent contract rose 2.3% to $96.89. 

Both benchmarks are on course to post a positive week, with supply seen as tight, illustrated by falling U.S. crude stockpiles, even as recession fears raise demand concerns.

Additionally, gold futures rose 1.3% to $1,651.35/oz, while EUR/USD traded 0.3% higher at 0.9782.